Ok, this is a bit of rant, but hear me out. I bought a used car and the dealer sold me an extended warranty from "Sentinel" (or NWC). Now, within 6 months, the transmission started giving issues and following the rules, I called NWC who directed me to a mechanic of their choice.
Now, the total bill came to about 400 bucks, but NWC are refusing to pay claiming this is general wear and tear. Now, their pds clearly states that this is a "discretionary risk product" — see page 7 of this pdf — http://www.pomi.com.au/new-downloads/EW-PDS.pdf
Now, I know that I got suckered and probably should have done my research enough. But, this product pretty much means the insurer just can simply reject any claims until they have money to pay for some repairs. In other words, it's a business that takes money without giving you any product in return for sure. Now, my question is how can this even be legal? For all that we know, anything and everything can be rejected under this condition.
If so, i'm sure we ozbargainers can get together and start a same type of company and give dealers a good rate. All we need to do is make sure that we honor only claims that don't eat into our profit. Easy enough way to make money..I'm seriously pissed and i'm pretty sure there are 100s like me which can be enough to file a class suit. First time, I'm hearing of such a product where the company pretty much can decide when to give service and when not to…I seriously would have had better luck playing the money paid in the extended warranty in a casino
End rant…comments welcome…
I sympathise with your situation. I did a quick search on "discretionary risk product" and it seems to be a common exclusion clause of extended warranties where the provider is a third party. One hit was a treasury discussion paper where it was mentioned that the nature of the product may not be evident without reading the PDS carefully. If they misled you that you would get rights you already had by purchasing an extended warranty you may have a case, but then you have the burden of proof of what the dealer said, if they did say that.
http://www.accc.gov.au/consumers/consumer-rights-guarantees/…
The only thing I can suggest is to write to Choice to draw attention to this trap for future buyers.
PS: Let me just add that where financial products are concerned, it seems that caveat emptor is the rule. The GFC showed us just how unscrupulous the players are. And they are still doing it, just search for Goldman Sachs aluminium moving scheme.